GEOFF HOON has written to Tony Blair complaining that Treasury demands for a £1.2 billion cut in defence spending plans will put at risk &#8220;current and future&#8221; military operations.
The Defence Secretary&#8217;s letter on Monday is being seen by Downing Street as a direct appeal, over the head of Gordon Brown, for the Prime Minister to intervene in what has become an acrimonious Whitehall row.

Ministry of Defence officials are understood to have given a warning that up to &#8220;a thousand cuts&#8221; in operational budgets will be needed next year to meet the £1.2 billion savings being asked for by the Treasury.

Measures already identified would include scrapping winter exercises in Norway for the Royal Marines, fast-jet training by RAF pilots, the grounding of certain aircraft and leaving navy ships in port to save on fuel costs.

General Sir Michael Walker, the Chief of Defence Staff, as well as the heads of the three Armed Services, are understood to have repeatedly told Downing Street about their &#8220;profound unhappiness&#8221; over the proposed cuts.

They point out that Britain&#8217;s substantial military commitments across the world, notably in Iraq, Afghanistan and the Balkans, were not envisaged when the Government completed its Strategic Defence Review during the last Parliament.

Although this blueprint has since been updated, the defence chiefs are understood to have said that spending constraints on the scale demanded by the Treasury would make &#8220;current and future operational commitments unmanageable&#8221;.

Such warnings come at an acutely sensitive time for Downing Street, not least because Mr Blair has made a priority of maintaining good relations with the Armed Forces throughout the past year, which has tested his interventionist foreign and defence policy almost to destruction.

The row also threatens to undermine Labour&#8217;s general election plans to highlight Tory proposals which, it claims, would cut defence spending by £1.5 billion over two years. Although the Chancellor allocated out of contingency reserves an additional £3 billion to the MoD for the Iraq war, defence chiefs believe that even this operation could be damaged by spending cuts.

They fear that scrapping training programmes would leave service personnel replacing those in the Gulf ill-prepared for active duty, as well as undermining morale. Mr Blair has been told that Britain&#8217;s capacity to respond to future global crises would also be impaired. For instance, the Royal Marines winter exercises are regarded as essential for fighting in mountain areas &#8212; such as those found in Afghanistan.

The Treasury is incredulous that there should be a sudden funding crisis after giving the MoD its biggest budget increase for 20 years during the last spending review in 2002. Mr Brown&#8217;s three-year settlement represents a cash-terms increase of £3.5 billion in defence spending by 2006.

The MoD budget is rising from £29.2 billion this year to £30.7 billion in 2005-06, but much of this is on fixed costs such as salaries which account for more than 35 per cent of total spending.

MoD officials have sought to exploit new Treasury resource accounting rules so that money can be found to pay for military operations. By keeping old equipment in service longer, the cost of depreciating assets were lower and the MoD could get extra cash while staying within overall spending limits.

The Treasury believes this &#8220;creative accounting&#8221; is the type of breach in spending rules which it cannot allow if the Government is to avoid increased public borrowing and tax rises ahead of the next election. The MoD has responded by commissioning an independent audit of its accountancy procedures which, it claims, show officials have acted within the rules for private firms. But Mr Brown has remained adamant that he will not allow extra MoD spending with his aides privately complaining about Mr Hoon&#8217;s &#8220;brinkmanship&#8221;.

The current impasse has caused dismay within the armed services, each of which has been asked to find scope for instant cuts. Defence sources said that it was one of the most painful exercises ever undertaken because the only areas that can provide guaranteed short-term savings have an unavoidable impact on servicemen and women.

Some training exercises have already been cut back, but the Service chiefs argue that if Britain&#8217;s Armed Forces are to continue to be the &#8220;force for good&#8221; around the world &#8212; as outlined in government strategy for the Services &#8212; their &#8220;people&#8221; need to be trained and equipped for every type of operational commitment. The Services have to have a certain number of units on &#8220;high readiness&#8221; which makes training imperative.

Cancelled exercises can save several million pounds, but, it is argued, it undermines the overall effectiveness of the fighting troops. Service chiefs say they are now having to turn to other areas such as equipment programmes. However, it is possible that suggested cuts might be politically unacceptable, such as a reduction in the number of Eurofighters for the RAF, as Britain is committed to that programme along with Germany, Spain and Italy, and there would be penalties both for the British taxpayer and for industry.

War Hero

Tell you what: how about b ollocks to British bloody industry, Spain France and Germany, and lets sack the ludicrous kit we don't need and look after our people! 'Politically unacceptable' - to line the pockets of industrialists, whereas its acceptable to trash our own forces. This is enraging. We're finally at the point where reality meets bullsh1t - we have been deeply underfunded for a long, long time, and there is no fat in the system. Good on Hoon and the MOD for trying to do the best with what we've got, and a pox on Brown and Boateng. Buy off the shelf for an immediate solution. If British Industry want our custom, they can sharpen up and get really competitive.

War Hero

This has been a long term problem building. Equipment kept inservice longer surley becomes more expensive to maintain. Add to that the increasing operational commitments and demands year on year for efficiency savings have undoubtably lead to postponments in procurement that have been hidden behind technical reasons. 'Creative' accounting has been used for years as has 'creative' procurment. If Tone wants to play with his toys he needs to be able to pay for them and maintain them. Looking at the tempo of ops I'm sure the long term use of reservists was never budgeted for as was the number of comittments and the short fall over the years in funding for kit the armed forces need to do their job.

Doctors...A highly qualified professional or a Failed Vet......discuss

LE

Part of the problem with procurement is that the military does not stand alone within corporate UK. We are at the whim of the politicians, but more than that we are linked to the rest of UK PLC. I agree that some things that can be bought off the shelf are good - some better. However, we NEED to keep pushing UK products, that are often the best in the world (anyone fancy another nation's NBC kit? No ta!) A lot of people are relying on these things for jobs.

It is the whole procurement thing that is wrong - the process of buying & maintaining is at fault. IMHO there are not enough 'intelligent customers' involved in procurement - people from the users who are involved in requirements, specifications and using the damn stuff. I have worked on projects that worked - largely because the user community was historically involved and entrenched in the whole development and testing. The Service guys involved had a sense of responsibility to their mates who would use it. We need more of this.

Old-Salt

It is the whole procurement thing that is wrong - the process of buying & maintaining is at fault. IMHO there are not enough 'intelligent customers' involved in procurement - people from the users who are involved in requirements, specifications and using the damn stuff. I have worked on projects that worked - largely because the user community was historically involved and entrenched in the whole development and testing. The Service guys involved had a sense of responsibility to their mates who would use it. We need more of this.

Well said Mr C. I worked on a large project that is well known for being beset with problems and delays (well, all right, it was BOWMAN actually) and a large element of the problem was the user community with its head in the clouds, coming up with requirements that were no better defined than a set of PowerPoint diagrams, while industry were working to a tight budget (imposed by fixed cost contracts) to produce fundamental equipment to the earlier (but better defined) requirement. You couldn't put "Digitization" in an MBT simply by stating a requirement for "information at the right place at the right time". If 50% of the uniformed staff who worked on coming up with these brigth ideas were employed with contractors on a day to day basis, progress would be faster, cheaper and better.

Old-Salt

Good on Mr Hoon for finally standing up for the armed forces, maybe he's taken in some of the feedback from his very vocal critics? maybe pigs might fly...!!

Either way it would be criminal to cut down on vital exercies like the winter deployments, Batus, Red flags etc, next stop will be general issue of playstations to all troops for in barrack "virtual exerciese"

LE

There don't appear to be any reports of a reply from the lardy Scottish thief or the Dear Leader (may he rule etc.) yet. Does this mean they have taken as much notice of Buff's letter as Hoon did of the calls to resign over his various GW2 cock-ups?